Retailers should do anti-rain dance
The May sales monitor carried out for the British Retail Consortium (BRC) by four times auditor of the year KPMG found a weather-related break in the YOY retail sales declines recorded in March and April.
The lift was a 1.9 percent increase compared to 1.8 in last year’s washed-out May, but “underlying trade remained tough, with widespread discounting.” Food and clothing were up, but big-ticket items, in particular electricals, were well down.
Home Retail Group
HMG shares fell slipped 6.89 percent in early trading, wiping £133 million from its market value following a poor Q1, the Times reports. CEO Jerry Duddy blamed a 20 percent fall in like-for-like seasonal sales at Homebase on lousy weather in March and April compared with 2007.
Even Argos found “trading conditions were more difficult for seasonal categories and the furniture and homewares market remains challenging.” HRG CFO Richard Aston said “we have a more pessimistic outlook view of 2009 than when we did our three year review at the start of the year.”
Carphone Warehouse
CPW shares were down 10 percent to a five year low despite reporting pre-tax profits up 75 per cent in Q1 and raising its dividend 31 percent to 4.25p. Overall retail gloom has temporarily taken the lustre off the group’s joint venture with US retail giant BestBuy.
However the share price fell on CPW’s announcement that net broadband customer gains for TalkTalk were lower than expected, and that it expects lower growth in its broadband business in the year ahead.
TalkTalk customer retention, however, was improving, and margins were improved by continued success in moving customers from unbundled BT lines to CPW’s own network, predicted to be 80 percent by next march.
CEO Charles Dunstone put a brave face on it, saying that once the BestBuy was complete the group would have “two well-positioned businesses, a high-quality asset base, significant new growth opportunities and a strong balance sheet.”
